The battle for Europe continues
Has the ECJ's recent rulings on the Netherlands and Sweden consigned operators' freedom to offer services across EU borders to the history books?
The recent European Court of Justice (ECJ) decisions to back De Lotto’s monopoÂly in the Netherlands against Ladbrokes and Betfair and to uphold Sweden’s ban on marÂketing by non-licensed sites struck yet another blow to operators fighting monopolies across the continent.
Following on from Bwin’s defeat against the PorÂtuguese state monopoly La Santa Casa da MisericorÂdia, has this consigned to the history books operators’ long-running battle for the freedom to offer products and services across EU borders? This freedom is after all supported by Articles 49 and 43 of the EU Treaty and the Placanica and Gambelli precedents.
As the ECJ’s latest rulings clearly state, the rights of EU-licensed operators can be restricted in favour of incumbent monopolies if the public interest is deemed to be at stake.
The ECJ’s Netherlands ruling also “made without foundation”, in Betfair’s words, the case that online betting represented a greater danger to the public inÂterest than offline forms, and that restrictions on priÂvate operators were justified in the absence of an EU-wide harmonised framework for egaming.
According to gaming lawyer Quirino Mancini of SCM Partners, the ECJ has, with these precedents, made it clear that each member state has the right to regulate all egaming activity within its borders.
“Article 49 and Article 43 theories brought two very nice rulings that can be framed and hung on the wall, but they are dead. Even when they are fighting for freedom of cross-border services, all the big operators, Betfair, Bwin, PartyGaming, are licensing country by country because they cannot afford to lose market share and local authorities are not allowing them to cross borders. That is the only realistic approach they can take in the circumstances,” Mancini said.
This is despite the fact that these local licensing regimes lack legitimacy under EU law, according to Tom Lippiett, associate at law firm Berwin LeightÂon Paisner. “If you put it to any EU academic, and I have, it’s a non-argument. It’s simply that political pressure is such that it has been accepted that this is the halfway house.”
Chief executive of operator representative body the Remote Gambling Association, Clive HawksÂwood, argues the industry now needs to focus lobÂbying efforts on mitigating the worst effects of the emerging regulatory landscape. “If we’re going to have a patchwork of local licensing underpinned at some point with some form of harmonisation, then we should focus on getting increased levels of mutual recognition between regulators. They won’t agree on everything but there’s no need for them to go in and check everything themselves.”
At the European Gaming and Betting Association (EGBA), which campaigns for a single EU gaming market, secretary general Sigrid Ligne however sees the move in Europe “from a monopoly to a multi-opÂerators licensing approach” as supporting the drive towards EU-wide harmonisation of licensing and technical standards for egaming.
“Now, as member states are moving in this direcÂtion, we need to avoid segmentation of the market into 27 mini internet markets. But although member states are not obliged to automatically recognise liÂcenses granted by other EU jurisdictions, they are obliged on the basis of ECJ jurisprudence to take into account other existing licensing requirements. They cannot force EU operators to duplicate, at very high cost, administrative and technical requirements alÂready fulfilled in other EU jurisdictions.”
PKR chief executive Malcolm Graham agrees that beyond a consistent tax structure which would enable such bi-lateral arrangements to work, the inÂdustry should now be working with governments on ensuring “we are not replicating vast infrastructural investments in each geography, so we are all using a single hub”.
Isabelle Parize, vice chair of Mangas Gaming, owner of Betclic, Expekt, Everest and BetAtHome, is also positive regarding the recent pro-harmonisation initiatives of European Commissioner for the InterÂnal Market and Services, Michel Barnier.
“Today Brussels is playing catch up when it comes to regulation. Mr Barnier’s initiative is commendable and we hope a green paper will be adopted and folÂlowed by legislation, possibly a European directive.”
Quirino also posits the argument for harmonisaÂtion in rather more immediate terms. “If we have to license in 27 different countries in Europe, fine, but please make sure we can do a copy-paste job rather than getting crazy with submitting 15,000 pages of licensing pages in France, versus doing the same in Italy and Denmark.”